There’s aright old Opera down at Rockhopper these days!
“People investing here need to realise the inherent danger in these small cap Falkland capers” so says analysts all across the market over the last few days. So what brought on this volte face? Particularly as these same chins were banding around figures well excess of where the RKH sp currently sits. Has reality set in? Is it a blip? Or have we all been led a merry Falklands south sea dance?
Well it appears that RKH’s CP has refused the rubber stamp needed to back up the oil estimates on Sealion more information is required! Then there’s the dreaded cash-call known to be in excess of a whooping £220 million! However Merrill are still bullish on RKH
” RPS appears to interpret that as sands thin away from the well the distribution of the reservoir could be different from the original estimates. Importantly, we believe that even at this lower level of contingent resources SeaLion is still economically viable as a stand alone development.
– In contrast, management interpret the data differently and remain confident that SeaLion still offers significant upside – potentially considerably bigger than the auditors’ estimates as new sand bodies were identified in the lower fan. Given that the data set is work in progress and was meant to evaluate drilling locations and not offer a definite answer on sand thickness, the final answer to the puzzle will only be known after the company drills new holes next year”.
As are a whole host of other big names. Cannacord
“The reason for the downgrade from 242m barrels recoverable to around 170m barrels? Quite simply that the independent Competent Person currently compiling a CPR for the group believes it does not currently have sufficient info on the multiple stacked fans that make up the Sea Lion overall structure to agree with RKH’s estimates. Some of these stacked fans have yet to be penetrated by a well, hence the uncertainty. Perhaps RKH was being overly optimistic on reserves, perhaps the Competent Person is being overly cautious – reserves determination on limited data is highly subjective. RKH also says that as a result its CPR has been delayed into H2-2011 until further 3D seismic has been acquired and further drilling has taken place”
Unfortunately the problems besetting the Falklands oil campaign are myriad and many. Every company out there will require further capital raising. As for what price level on RKH TRY 200/250P! I know that’s going to hurt many investors but these are the figures being talked of here!
As for my opinion RKH have had a fantastic ride hitting over 500p! I sorely hope that most of the Blogosphere cashed in their chips at the higher levels!
For those who are planning to hold through thick and thin what next? Well a good dose of alcohol on a daily basis may help! And a crash course in CPR!
- The acrid stench of burnt fingers – Falklands oil edition (ftalphaville.ft.com)
- UPDATE 1-Rockhopper casts doubt on Falklands reserves (reuters.com)
- Rockhopper shares tumble on oil doubts (telegraph.co.uk)
- Duster! (ftalphaville.ft.com)
- UPDATE 1-Rockhopper says sees Falklands oil find viable (reuters.com)
- UPDATE 1-Rockhopper says Falklands well could have 4,000 bopd (reuters.com)
- Rockhopper admits Falklands well is dry (telegraph.co.uk)
- Rockhopper fails to find oil with Falklands well (guardian.co.uk)
- UPDATE 1-Rockhopper says latest Falklands well is dry hole (reuters.com)
- It’s oil out war (thesun.co.uk)